Original Listing Requirements - TSX Part III of the TSX Company Manual TSXV Graduations • IPOs • Inter-listing applications • Backdoor Listings (aka: RTOs) • Spin-offs •
Listing Requirements General List for Mining Companies • NI 43-101 Technical Report • Minimum Property Ownership • Exploration & Development or Producing Requirements • Management Track Record and Experience • Sufficient Working Capital and/or Mine Life • Distribution, Market Capital and Public Float
Property requirements TSXV – Tier 2 TSX – Exploration Minimum 50% interest in a qualifying property Minimum 50% interest in an advanced property ($100,000 of exploration expenditures on the (mineralization three dimensions and at qualifying property in the past 3 years) economically interesting grades) Work program: $200,000 Work program: $750,000 TSXV – Tier 1 TSX – Producer Minimum 50% interest in a Tier 1 property Three years of proven and probable reserves (property with substantial geological merit) Commercial production decision made or in Work program: $500,000 commercial production
Financial requirements TSXV – Tier 2 TSX – Exploration Adequate working capital for 12 months + $2 million in working capital $100,000 in allocated funds Sufficient funds for 18 months $3 million in net tangible assets Appropriate capital structure TSXV – Tier 1 TSX – Producer Adequate working capital for 18 months + Adequate working capital $200,000 in allocated funds Appropriate capital structure $2 million in net tangible assets Non exempt: $4 million in net tangible assets + likelihood of future profitability Exempt: $7.5 million in net tangible assets + pre- tax profits and cash flow
Management • Management, including board of directors, should have adequate experience and technical expertise relevant to the company’s business and industry as well as adequate public company experience • Management team includes qualified Chairman, CEO, CFO and Corporate Secretary • Management and members of the board of directors must complete Personal Information Forms (PIFs) to assess suitability
Distribution & Sponsorship TSX VENTURE EXCHANGE TORONTO STOCK EXCHANGE • Public float of 500,000 shares (Tier • $4,000,000 publicly held 2) or 1,000,000 shares (Tier 1) • 1,000,000 free trading shares • 200 (Tier 1) or 250 (Tier 2) public • 300 public board lot holders board lot holders • Sponsorship may be required • 20% of the issued and outstanding in the hands of public shareholders • Sponsorship may be required
TSX & TSXV Disclosure Policies TSX Company Manual Timely Disclosure Policy (Sections 406 – 423.4) • Appendix B: Disclosure Standards for Companies Engaged in Mineral Exploration, Development and Production TSXV Corporate Finance Manual • Policy 1.1 Interpretation (Geological Report, Approved Expenditures, Tier 1 or 2 Property) • Policy 3.3 Timely Disclosure • Appendix 3E News Release Guidelines • Appendix 3F Mining Standard Guidelines • Appendix 3G Valuation Standards and Guidelines for Mineral Properties
TSX/TSXV Compliance & Disclosure • Timely Disclosure Policy • Director and Officer Suitability • Continued Listing Requirements (CLRs) • Corporate Governance
Continued Listing Requirements CLR TSXV (Policy 2.5) TSX (Part VII) Insolvency Ongoing concern issue/shell or significantly reduced business Minimum expenditure/revenue levels $50k 1 yr. or 100k 2 yrs. exploration $350k exploration expenditures and expenditures $3M revenue Market capitalization and public $100k value of public float or less $3M mkt cap. or $2M value of public distribution than 150 shareholders or less than float or less than 150 shareholders or 500,000 shares in the public float less than 500,000 shares in the public float Breach of TSXV/TSX listing agreement Failure to pay fees
If in Default with CLRs • Remedial vs. Expedited Review • Hearings • Suspension • Delisting • Appeals
Material Information & Timely Disclosure Rod Young, P. Geo. Senior Manager, Geologist Compliance & Disclosure, TSX Venture Exchange
Material Information ALL Material Information MUST be disclosed No Disclosure = Not Material Don’t Think: I don’t want to disclose » Therefore Not Material
Material Information - Definitions TSX-V Exchange Policy: “Material Information” is any information relating to the business and affairs of an Issuer that results in or would reasonably be expected to result in a significant change in the market price or value of any of the Issuer’s Listed Shares, and includes Material Facts and Material Changes. (TSX-V Exchange Policy 3.3, Sec. 2.1 – emphasis added) (TSX Company Manual Part IV, Sec. 407 - effectively same definition)
Material Information - Definitions • BC Securities Act: – Material Fact - “…a fact that would reasonably be expected to have a significant effect on the market price or value of the securities…” – Material Change - “…a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of a security of the issuer…” (or a decision to implement a change) • Definitions of “material fact” and “material change” under securities legislation are based on a market impact test. (see NP 51-201, Part 4 for more guidance on ‘Materiality’)
What Information is Material? • It is the responsibility of the issuer to make the initial determination on if the information is material • Reviewing with Exchange/IIROC/Commission does not remove this responsibility • What information is material varies based on issuer • Final determination on if the information is material is an objective test - Rule of Thumb - “If in doubt, put it out”
TSX-V: Events Deemed Material in Nature • TSX-V Exchange Policy lists specific events* deemed to be material in nature and require immediate disclosure – Exploration results & developments ( Positive or Negative ) – Significant property acquisition or disposition, JV agreements – Significant litigation – Significant labour/major contractor dispute – Significant change in capital investment plans or corporate objectives (*Mining Related - see TSX-V Exchange Policy 3.3, Sec. 3.8 (a)-(y) for FULL List) TSX has list of examples of developments likely to require disclosure (TSX Company Manual Sec. 410 (a)-(q))
Confidential Material Information When can Material Information be kept confidential? • When immediate disclosure would be unduly detrimental to the interests of the company – Provide competitors with significant benefit (e.g. loss of corporate opportunity) – Impair the ability of the company to complete a transaction (e.g. raise the acquisition price, invite competitive bids) • NOT because stock likely to drop with the announcement! • RARE - Only allowed in isolated and restricted circumstances, and in accordance with Securities Laws
Timing and Dissemination • Disclosure of Material Information should be: – Prompt (Subject to pre-filing with IIROC) Responsibility of Company – Simultaneous Responsibility of commercial – Thorough news disseminator • Material Information must be disclosed “immediately” (however, ‘reasonable’ time allowed to prepare disclosure) • News release must be distributed via full text commercial news release dissemination service (*TSX has list of acceptable providers, TSX-V does NOT) • Follow-up news release must receive the same or greater dissemination • Request Halt when disclosing significant Material Information during trading hours (contact IIROC)
TSX-V: Pre-Filing with IIROC • TSX-V pre-filing required (*Mining/Exploration Related): – First time disclosure of new resource/reserve estimates – First time disclosure of economic analysis (Any operating projections – feasibility studies, PEA, etc.) – Major property acquisitions/dispositions (Qualifying Transactions, Reviewable Transactions) – (TSX-V Exchange Policy 3.2, Sec. 4.2 – full list) • TSX-V material news releases, esp. where halt required • TSX-V ALWAYS wait for IIROC response prior to dissemination • If in doubt contact IIROC • IIROC issues comments for revision or ‘no objection’ - but may be subject to further comment by Exchange or Commissions
News Release Guidelines 1. State specific facts – Convey specific and accurate facts – Avoid subjective terms and overly promotional language 2. State all the facts – State all relevant information about the matter being disclosed – Failure to state information necessary to make a statement not misleading is just as serious as making a false statement 3. Make balanced presentation of the facts – Report positive and negative results 4. QP MUST be involved – Name QP who reviewed & approved, and relationship to Company
Overly Promotional • Avoid superlatives • Lots of warnings issued (don’t rely on other news releases) • CEO/President “quotes” common offender
Exploration Results • Source of information • Geophysical and geochemical anomalies (an anomaly does not mean you have found a mineral deposit) • Sampling (provide details: type, number, location) • Drilling (Report results for all holes, not just the best, true width, hole locations) • Report good and bad results • Clearly distinguish between new and previously disclosed results
Analytical Results • Analytical method (ICP, AA, fire assay, etc.) • Name and location of Laboratory • Lab certification/accreditation or lack thereof • Comment on QA/QC • Note any non-standard sampling, preparation or procedures • Provide relevant statistical details (range & distribution) • Selective disclosure prohibited (NO “values up to…”) • Gross metal value NOT acceptable
Visual Observations • Prohibited: – Visual estimates of grade (e.g. 1% copper) – Visual estimates of mineralization (e.g. 5% chalcopyrite) • Not Prohibited: – Factual observations (e.g. visible gold) – Photos • NOT RECOMMENDED (recommend waiting for assay results) • Strongly recommend pre-filing with IIROC
DO NOT use these Phrases: • “ The following information is not compliant with NI 43- 101 …” ALL disclosure MUST be compliant with NI 43-101 • “ NI 43-101 compliant… [drilling, sampling, etc.] ” NI 43-101 only regulates disclosure NOT how to conduct the work • “This information should not be relied upon” If information cannot be relied upon, it is not suitable for disclosure
Restricted & Voluntary Disclosure Darin Wayslik, P. Geo Senior Geologist, BCSC
Applicable Rules • PART 1 DEFINITIONS AND INTERPRETATION • PART 2 REQUIREMENTS APPLICABLE TO ALL DISCLOSURE • PART 3 ADDITIONAL REQUIREMENTS FOR WRITTEN DISCLOSURE • PART 4 OBLIGATION TO FILE A TECHNICAL REPORT
Definitions Section 1.1 • Disclosure • Written Disclosure • Data Verification • Preliminary Economic Assessment • Historical Estimate • Exploration Information • Technical Report
Disclosure Definitions Disclosure
Disclosure Definitions Written Disclosure
Voluntary Disclosure Investor relations materials – Provides a powerful tool for companies to communicate with investors • Investor presentations • Fact sheets • Brochures • Media articles • Corporate Videos • Interviews • Links to third party content • Social Media –Twitter, Facebook, LinkedIn, SlideShare, Giphy etc… • President’s Messages • Blogs
Tip: Make use of section 3.5 • Exception for written disclosure already filed • Note – only applies to the following disclosure: – s. 3.2 – Data verification – s. 3.3 – Exploration information – parts of s. 3.4 – Mineral resources and reserves (a) Effective date (c) Key assumptions (d) Known risks
Restricted Disclosure – s. 2.3 The following restrictions apply : (1) An issuer must not disclose: (a) the quantity , grade or metal/mineral content of a deposit not categorized as meas./ind./inf. resources or proven/prob. reserves (b) results of an economic analysis that includes or is based on inferred resources, exploration target or historical estimate
Restricted Disclosure – s. 2.3 The following restrictions apply : (1) An issuer must not disclose: (c) the gross $ value of metal or mineral in a deposit or a sampled interval or drill intersection; (d) a metal or mineral equivalent grade for a multiple commodity deposit, sampled interval, or drill intersections, unless it also discloses the grade of each metal or mineral used to establish the metal or mineral equivalent grade
Exploration Targets - s. 2.3(2) • A carve out of 2.3(1)(a) restriction – a target for further exploration • Is a conceptual estimate and needs to be ranges of both tonnages & grades • States with equal prominence the following: ‒ Potential quantity and grade is conceptual in nature ‒ Insufficient exploration to define a mineral resource ‒ Uncertain if a mineral resource estimate will be delineated • Provide the basis on which exploration target has been determined
Exploration Target – Common Pitfalls • Lack of required cautionary language • Not disclosing as a range or the range disclosed is not reasonable • Not stating the basis for determining the potential
Preliminary Economic Assessment – s. 2.3(3) • A carve out of 2.3(1)(b) restriction • Is a study other than a pre-feasibility or feasibility study • States with equal prominence the following: ‒ The assessment is preliminary in nature ‒ If it includes inferred mineral resources, that they are too speculative geologically to have economic considerations applied that would enable them to be mineral reserves ‒ There is no certainty the assessment will be realized • Provide the basis for the assessment and any qualifications and assumptions made
PEA – Common Pitfalls • Using terms such as “ Robust ” • Lack of required cautionary language • Stating or implying economic viability • Adding to PFS/FS mine plan Guidance for disclosing PEA’s is in Part 2.3 of Companion Policy 43-101CP and CSA Staff Notice 43-307
Historical Estimates - s. 2.4 NI 43-101 Prepared by or on behalf of a previous issuer/operator and not verified by the current issuer – carve out of 2.2 1) Provides the ORIGINAL Source & Date of the estimate s. 2.4(a) 2) States the Relevance & Reliability s. 2.4(b) 3) Provide Key Assumptions etc. (if known) s. 2.4(c) 4) Gives Classification/Categories and/or compares to s. 2.4(d) 5) Includes any more recent estimates s. 2.4(e) 6) Work to be done s. 2.4(f) 7) No QP work & ‘not current’ resource statements s. 2.4(g) Guidance for disclosing historical estimates is in Part 2.4 of Companion Policy 43-101CP
Historical Estimates – Common Pitfalls • Using terms such as “ not NI 43-101 compliant ” • No source, date & original classification (inc. grade & tonnage) • Lack of required cautionary language • Adding historical estimate to current estimates • Disclosing an economic analysis based on historical (previous) estimate (restricted disclosure under s. 2.3)
Report Trigger • PART 4 OBLIGATION TO FILE A TECHNICAL REPORT – See 4.2 (1)(j) • Part 2.4(5) of Companion Policy – Treating a Historical Resource as Current
COFFEE BREAK
Technical Reports: Triggers, General Requirements & Common Mistakes Stefan Lopatka, P. Geo. Senior Manager/ Geologist TSX Venture Exchange
Disclosure of Scientific and Technical Information for Mineral Projects • Disclosure, in any form, of Scientific and Technical information on a Mineral Project is governed by National Instrument 43-101: Standards of Disclosure for Mineral Projects • Regardless of the purpose, trigger, or nature of the information; it must always comply with NI 43-101
Why are some Technical Reports reviewed by the Securities Commission...? Some by a Stock Exchange…?? And most of the time, I don’t get any comments at all…? What is the report for (trigger) 65
Technical Report Triggers NI 43-101 • NI 43-101 section 4: – On becoming a reporting issuer – Disclosure about Material Mineral Projects • IPO • First time resource and economic analysis • Material change in Resource or economic analysis • Information circular for share acquisition of property. • Annual Information Form • Valuation • Common feature, technical disclosure thru life cycle of project and company (advancement)
TSXV “Geological Report” Triggers • TSXV Corporate Policy Manual: – Initial Listing: to demonstrate property meets Listing Requirements (ILR). – Reverse Takeover /Change of Business/ Qualifying Transaction: Support new property acquisition (ILR) – Reviewable /Fundamental Acquisitions: Disclosure on new property • Common feature, technical disclosure for new project (acquisition)
TSX Report Triggers • TSX Company Manual: Subsection 314. Requirements for Eligibility for Listing: – a) Listing as producing Mining Company – b) Listing under the mineral exploration and development-stage category: – In each case a Technical Report by Independent Qualified Person 68
CSA vs. Exchanges • This variation in report triggers dictates the slightly differing needs of each Organization (the CSA and Exchanges) for technical reporting • Requirements of CSA is compliance with NI 43- 101, consistent with Form 43-101F1, with Guidance provided in Companion Policy 43- 101CP • so let us quickly look at the Exchanges requirements.
Geological Report • Within the context of the TSX Venture Exchange, a Geological Report is one of several disclosure documents required to be publicly filed in support of the Issuer’s transaction under Exchange Policy. • Definition*: a report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects or any successor instrument • * TSXV Corporate Policy Manual (TSXV-CPM) Policy 1.1
Geological Report Guidelines • TSXV-Corporate Policy Manual: Appendix 3F: • MINING STANDARDS GUIDELINES • Incorporates and expands upon the standards prescribed by Securities Laws (NI 43-101) • NI 43-101 Section 4.3 Required Form of Technical Report: • A technical report that is required to be filed ……. must be prepared in accordance with Form 43-101F1 • As such, – NI 43-101 dictates that a technical report must follow Form 43-101F1, and – TSXV Appendix 3F provides Exchange specific guidance on the disclosure for the Exchange
Technical Report - TSX Guidelines • Reports prepared by independent qualified persons, and the acceptability of the authors, shall conform to National Instrument 43-101 and be acceptable to the Exchange. Reports prepared in conformity with other reporting systems deemed to be the equivalent of NI 43-101 will normally be acceptable also. • TSX Company Manual section 314 72
Qualified Person & Independence • Under CSA: independent of Issuer • Under TSXV, relationship to Vendor in transaction becomes more important • QP interest in Vendor and property become paramount in considering independence of report • Under TSX: QP must be independent
Use of Geological Report – Listing Transaction • Determination of Initial Listing Requirements (ILR) (Policy 2.1) – Ownership & Obligations – Approved Expenditure (Prior Exploration) – Recommended program and Budgets • Requirements defined in TSXV-CPM Policy 2.1; • Based on Tier Level • Supports technical/ scientific disclosure in listing document (Prospectus, Information Circular, Filing Statement) • Additional Support for: – Mineral title documentation requirements – Evidence of Value requirements – Relation between parties (Non-Arm’s Length)
TSXV Initial Listing Requirements (ILR) Requirement Tier 2 Tier 1 Significant Interest (50%) Material interest Ownership Have or right to earn Operatorship >$100,000* over last 3 years Previous Exploration Minimum current resource By Issuer ( or vendor**) >$500,000 Drilling >$200,000 Phase 1 Recommended program non contingent Economic Study * Must meet approved expenditure definition * * By Vendor for RTO, COB, QT
TSX Listing Requirements (ILR) Exploration & Development Requirement TSX Producer TSX Exempt Stage Advanced Exploration Property 3 years proven & probable 3 years proven & property* minimum 50% Requirements reserves; production decision probable reserves; ownership** Recommended $750,000 on Advanced Profitable mining Bring mine into production program Exploration property operation *TSX will consider a property to be sufficiently advanced if continuity of mineralization is demonstrated in three dimensions at economically interesting grades **A company must hold or have the right to earn and maintain at least a 50% interest in the property. 76
Ownership • Ownership & Obligations: Form 43-101F1 Items 4(c), (d) & (h) – Disclosure of present mineral tenure – Disclosure of agreement for Issuers acquisition – Obligations: • Agreement obligation • Nature of mineral tenure and ability to transfer tenure. • Legal Title Opinion • Prior agreements • Government • Description of significant factors and risks that may affect access, title, or right or ability to perform work on the property
TSX-V ILR: Tier 2 – Approved Expenditures • Detail breakdown of exploration work on property • By years • Magnitude of work • Presented in manner so costs can be estimated • Clear indication of who carried out work (Issuer vs Vendor vs Others) – Definition of Approved Expenditures (Policy 1.1) • any exploration expenditures resulting or arising from, or relating to, geological and scientific surveys conducted on a mineral property where such surveys advanced a mineral project or enhanced the Issuer's geoscientific database. • but does not include any of the following costs or expenses: general and administrative, land maintenance, public affairs, required property payments, staking, property or project acquisition, flight expenditures of personnel where the project or property is non-domestic, tax and HST – Form 43-101F1 Items 9 & 10
ILR: Tier 2 – Approved Expenditures (continued) Approved Expenditures – Listing Application (initial listing on Exchange, IPO) • Exploration work carried out by Issuer prior to Listing – Listing of Spin-out (seasoned asset) • Exploration work carried out by Parent prior to Listing – Reverse Take-Over, Change of Business, or Qualifying Transaction (CPC), • Exploration work carried out by Vendor/ Target prior to transaction
ILR: Recommended Work Program – Recommended Program and Budgets • Minimum Requirements Based on Tier Level of Listing – Tier 1: a minimum $500,000 Phase 1 drilling program for the property based on the merits of previous exploration results (or an economic study) – Tier 2: a work program with an initial phase of no less than $200,000, as recommended in a Geological Report * Basis of unallocated working capital calculation • Form 43-101F1 Item 26
Use of Geological Report – Non Listing Transaction • Primary purpose to ensure disclosure document for new property for Issuer on public record (SEDAR) • Supporting document for determination of: Form 43-101F1 reference in red – Mineral title (Legal Title Opinion) Item 3 – Underlying agreements and obligations Item 4 – Evidence of Value (deferred Exploration Expenditures) Items 9 & 10 – Financial Plan (Recommended Program) Item 26 – Relation between parties (Non-Arm’s Length) Items 2 & 4
Top Mistakes when filing a Geological Report with the Exchange (in support of an Acquisition) • The report is not made out to the issuer (Vendor’s report) • The issuer’s rights to the property lacks details (agreement details and consideration, legal title opinion, relationship among parties) • QP not independent • QP independence of Vendor, property not disclosed
Technical Reports & Exploration Information Common Pitfalls & Problems Sally Gillies, P. Geo. Senior Manager/Geologist TSX Venture Exchange
Why create a Technical Report? Qualified Person Company “Because I’m going to get paid!” To promote my property?! No! Because it was triggered under NI 43-101 or Exchange Policies… There are some rules!
Format for a Technical Report (and Exploration Information) Technical Report: Required form of Technical Report: s. 4.3 of NI 43-101 A required report must be prepared in accordance with Form 43-101F1 1) Early Stage Use all headings: Items 1-14 & 23-27 2) Advanced Property Use all headings: Items 1-27 has reserves or resources where potential economic viability is supported by a mining study Exploration Information: Geological, geophysical, geochemical, sampling, drilling, assays etc. These requirements apply anywhere & anytime you disclose this information
Elements of a NI 43-101 Technical Report 1. Title Title Page on the New Exploration Gold-Silver-Zinc-Lithium Property in 2. Location Province of Country sometimes Mapsheet or Coordinates For 3. Issuer The Issuing Company 4.Name & Prof. By Josephine Smithsonite, P. Geo. and Designation of Geoffrey Eiffel, P. Eng. QP Best Ever Global Geologic Services Ltd. Effective Date: December 31, 2017 5. Effective Date
Item 3: Reliance on Other Experts •May disclaim Title (Legal), Political, Tax, & Environmental, Pricing information •The QP must state the following about the reliance: • Source of information – including date, title and author • Extent of reliance • What portion(s) of the report is this used • Cannot disclaim responsibility for part of report that QP prepared or supervised • Cannot disclaim responsibility for data and opinions within area of expertise (expected to verify relied on geological data) • Additional limits on disclaimers found in s. 6.4 of NI 43-101 (cannot limit filing on SEDAR etc.)
Item 4: Property Description & Location LEGEND Roads Shaft Power lines Tailings Prospect Waste Protected Bird haven Often omitted: • Issuer’s rights to the property • Legal access, surface rights • Environmental liabilities • Significant issues that may affect title, access or ability to do work e.g. Indigenous rights, bird sanctuary etc.
Item 6: History • Include prior ownership, ownership changes, past production • Be clear about what historical information is on the issuer’s property and what is not • This is where Historical Estimates (s. 2.4) belong • If doing an Exchange required report it may be better to disclose the property vendor’s work under Item 9: Exploration
Item 8: Deposit Types Describe the mineral deposit type(s) being investigated or explored for • Just stating what deposit type is being explored for is not enough • A technical report is intended for the investing public and their advisors, who in most cases are not geological experts – Please provide a written description of deposit type as well!
Item 9: Exploration (Including NI43-101 s. 3.3) • If the report is required under NI 43-101 , then the Issuer’s exploration work is disclosed here; or may include previous issuer’s work if you believe it is relevant to the project • If the report is required by the Exchange (a transaction), then the Vendor’s work may be disclosed here
Exploration Information: Common Pitfalls • Procedures and parameters relating to surveys and investigations – e.g. number of samples collected in rock/soil surveys, number of line kilometres in geophysical surveys – maps • Significant results and interpretation
Item 10: Drilling (Includes NI 43-101 s. 3.3) • If the report is required by NI 43-101, then the Issuer’s work is disclosed here – or – include relevant drilling (related to a resource estimate) • If the report is required by the Exchange only for a transaction such as Qualifying Transaction, Reverse Takeover or Change of Business, then a Vendor’s work may be disclosed here
Drilling Results: Common Pitfalls • Neglected to mention the type of drilling (diamond, RC, backpack – winkie, etc.) • Didn’t provide collar location, azimuth, and dip of drill holes • Didn’t disclose any relevant assays and depth of samples • Didn’t mention higher grade intervals within lower grade intersection • Provided no comment on True widths/thicknesses of drill intervals (as known)
Item 11: Sample Preparation, Analyses & Security (Including NI43-101 s. 3.3) • Disclosing Field sampling procedures • Provide Sampling process – for each type of sample program • Discuss the security measures to ensure the validity and integrity of samples • Disclosing Lab analyses • Post sampling handling and analysis For all sampling discussed • Identify Lab and certification of lab. in Item (9) Exploration or • Is the Lab independent of the issuer? Item (10) Drilling, the • Discuss the QA/QC measures applied (Lab & QA/QC belongs here Company) • QP must provide an opinion on sample preparation, security and analytical procedures
Sampling Results: Common Pitfalls • Providing QA/QC for historical data • Visual estimates • Giving/relying on field instrument analysis alone • Omitting QA/QC • Failing to name the lab & relationship • Overly promotional • QP not providing opinion on adequacy of sample preparation, security and analytical procedures
Item 12: Data Verification Data Verification is what the QP did to confirm the information • As the QP is relying on various geological data, that data must be verified by the QP e.g. Check news releases, field checking, independent assaying, assessment reports… • Any limitations or failure to conduct such verification and the reasons why (maybe you cannot access the sites/samples) • QP’s opinion on the adequacy of the data for the purposes used in the report – can you rely on it? If not, say so (and what can be done going forward)
Item 13: Mineral Processing & Metallurgical Testing • This should only include metallurgical work done by the Issuer on the property • If the report is required by the Exchange only for a transaction such as Qualifying Transaction, Reverse Take-over or Change of Business, then the Vendor’s work should be disclosed here Common Pitfalls: “The data verification procedures applied by the QP” Were the samples representative? Any processing factors or deleterious elements that could have a serious effect on potential economic extractions If a resource is included in the report, the recovery rates from the metallurgical work should be included in the calculation – and if not, explain why not
Item 14: Mineral Resource Estimates A current resource is defined in s. 1.2 of the Instrument 1. inferred mineral resource 2. indicated mineral resource 3. measured mineral resource ; having the meanings ascribed by CIM; the CIM Definition Standards, as amended. A mineral resource or mineral reserve can only be current for the Issuer who has commissioned the Technical Report! As per CIM Definition Standards (May 10, 2014) for the definition of Mineral Resources, the phrase ‘reasonable prospects for eventual economic extraction’ implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction.
Item 14: Mineral Resource Estimates Must comply with all disclosure requirements for mineral resources set out in the Instrument, including NI43-101, sections 2.2, 2.3, and 3.4 AND Form 43-101F1, Item 14 Item 14(a): Key assumptions, parameters methods used to estimate the mineral resource CIMM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (November 29, 2019( Section 3.4(a): the effective date of each estimate of mineral resources and mineral reserves Section 3.4(d): the identification of any known legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources or mineral reserves For example – land access disputes, infrastructure problems, NGO funded campaigns…
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